Caveat emptor, let the buyer beware. Because of the large amounts involved with real estate, however, courts and the government have offered buyers some measure of relief. In fact, the trend in the courts has been away from the “caveat emptor” approach. Property buyers have two lawsuit options if and when they feel they have been defrauded by the seller (or the seller’s agent):

• Sue for damages. The buyer can keep the newly purchased property but sue the seller for damages incurred from the fraud. For example, if the furnace is not working as warranted by the seller, the buyer can sue the seller for the cost of the replacement or repair-after the purchase closing has already been consummated.
• Sue to set aside the sale. The buyer can also try to get the whole transaction rescinded. If the buyer is successful in the lawsuit, the property is returned to the seller and the funds are returned to the buyer.

The two tactics require different level of proofs from the buyer initiating the suit. To win a suit for damages, the buyer has to prove that the seller intentionally lied about the issue behind the damage. To win a ruling to set aside the sale, the buyer only needs to demonstrate a material fact; the buyer does not need to show that the seller intentionally lied.

Fraud committed by the seller’s agent is basically fraud committed in the seller’s name. The seller will still be liable. There are three basic ways in which sellers can commit fraud:

• Misrepresentation
• Conduct
• Non-disclosure